The nuclear mess continues

News reports in the last few days indicate the current government's penchant for bending all rules continues unabated. The government is in a hurry to sign up a deal with the US nuclear suppliers without due diligence. And, apparently, at  the cost of signing an illegal agreement.

Chellaney tweeted about an article published at www.project-syndicate.org which yet again reveals the lack of logic in pursuing nuclear power. But then when was logic the strong point of the current dispensation

The Promise of Power

My latest article on nuclear power written for wealth insight

Nuclear power has been projected as the energy on which future growth will depend. But, it's neither feasible nor desirable...

Earlier this month, I had the opportunity to attend the book launch of "The Power of Promise" by MV Ramana. The book discusses Nuclear Energy in India and its outlook – a subject that needs greater public debate. In the context of an energy deficient India, nuclear power has often been projected as the panacea, the energy fount on which future growth of the economy will depend. The case for nuclear power is based on two major argument (a) it is cheap (b) it is non polluting and abundant.

Marshalling rare facts from a secretive nuclear establishment, Ramana argues that nuclear power as a major source of India's energy plan is neither feasible nor desirable.

Nuclear power: more expensive than coal
In 2003, an interdisciplinary study by researchers at MIT came to the conclusion "In deregulated markets, nuclear power is not now cost competitive with coal and natural gas". This study was updated in 2009. The conclusion remains: "the prospects for nuclear energy as an option are limited, the report finds, by four unresolved problems: high relative costs; perceived adverse safety, environmental, and health effects; potential security risks stemming from proliferation; and unresolved challenges in long-term management of nuclear wastes."

Ramana's conclusion is similar. He compares cost of power generated from coal to that generated from nuclear plant – using assumptions that are grossly in favour of the nuclear alternative. He assumes that coal fired generators last a decade less than nuclear reactors, have to pay more for fly-ash disposal (they don't). Simultaneously, the radioactive waste disposal in nuclear power plants is supposed to cost only 2 paise per unit (it will likely cost a lot more). Additionally, he assumes that coal travels 1,400 kms to reach the power plant (over 33 per cent of coal fired generators are either at the pit head or increasingly near ports where the coal can be imported). Despite all these assumptions, at any cost of capital over 4 per cent, coal based power generators are cheaper than the nuclear alternative on the basis of levelised tariffs.

Safety: a significant concern
None of the above factors in the cost that needs to be paid for security, and potential health issues. It is pertinent to note the response of various government departments with regard to preparedness in case of nuclear accidents. While reacting to the Parliamentary standing committee discussing the nuclear liability bill, the ministry of water resources remarked "The Secretary, water resources, was of the opinion that any nuclear incident may induce radioactive contaminations in surface, ground water bodies, and other water resources. However, he stated that the Ministry does not have any facility for testing water quality".

The Secretary, Ministry of Health and Family Welfare while deposing before the Committee mentioned that her Ministry is "nowhere (ready) to meet an eventuality that may arise out of nuclear and radiological emergencies." She further mentioned that while drafting the Bill the Department of Atomic Energy did not consult them. She added: "Since the response system to deal with any kind of emergency of such type, the hospitals are not well-equipped, it is natural that mortality and morbidity due to multiple burn, blasts, radiation injuries and psycho-social impact could be on very high scale and medical tackling of such a large emergency could have enough repercussions in the nearby areas of radioactive fall out."

Proponents of nuclear power maintain that the likelihood of a nuclear accident remains remote – not so. Incidents like the recent accident in Japan illustrate that the best systems are prone to failure and in a densely-populated country like India, can lead to disastrous consequences. As Ramana pointed out in his speech – if the manufacturers are really so confident of their equipment being safe, why are they insisting on shielding themselves from nuclear liability – clearly there remain a real and non-trivial risk of nuclear disaster.

Is the DAE plan feasible?
In 1964, Bhabha stated "There is little doubt that before the end of the century, atomic energy will be producing a substantial part of the power in India, and therefore practically all the addition to our power generation will come from it at that time". In 1972, Homi Sethna, chairman AEC, predicted that India would have 43GW of nuclear generating capacity by 2000. In reality, in 2000, India had 2.7GW.

In September 2009, the PM stated that India will have 470 GW of nuclear power capacity by 2050. To put this in perspective, out of the total generation of over 200GW in India, less than 5GW is currently nuclear. Can we really expect almost a 100 fold increase in nuclear power generation capacity over the next 40 years?

India's plan for rapid growth of nuclear power is contingent on using fast breeder reactors (FBR). FBR's generate plutonium and are supposed to provide fuel for the next reactor – a sort of chain reaction allowing unlimited amounts of fuel! However, Ramana's analysis reveals that when adjusted for the time taken for a reactor to generate enough fuel to power up the next, the theoretical rate at which reactors can be built, reduces by 60 per cent of what the DAE estimates. In other words, "a fast growth of breeder reactors is not even theoretically, let alone practically, achievable."

Rosier in the future
As with many government estimates, the future seems rosier than history would suggest. A recent example is the criticism that the government's economic mandarins are reserving for CSO's advance GDP growth estimate of 5 per cent for 2012-13. Responding to the CSO's decade low figures, the Deputy Chairman of the Planning Commission reacted "I think it (growth projection of 5 per cent in 2012-13) is very low. I have been told that CSO has taken data from April to November (2012-13) and they just projected it (advance estimates)". Hasseb Drabu's comment is worth noting - "The sources and methodology adopted by the CSO are laid out by the System of National Accounts 2008, the latest version of the international statistical standard for national accounts, adopted by the United Nations Statistical Commission (UNSC). ...In this context, it will be enlightening to know which system of national accounts in the world is not based on past data. Also, what other data can official national accounts possibly be based on?"

There cannot be a better time to warn of rosy projections based on views, not data, as we enter the Budget Session. As investors, we need to keep assumption firmly rooted to reality. And yes, India's quest for renewable energy needs to be strongly focussed on the solar option – where paradoxically, the government plans to impose an additional import duty!

Nuclear Upsets

If it seems to be a season of "I told you so", I cant help it ! The PM's much touted success in the Indo US nuclear pact is now in tatters. To use the words of my favourite strategic affairs writer Brahma Chellaney,

the deal has come to symbolize the travails of the Singh government — scandals, broken promises, malfeasance, poor public accountability, and the resort to casuistry to camouflage reality. The cash-for-votes scandal in Parliament set the stage for the other scams that have followed.

Even writers who were earlier supporting the deal, have had to do an about face. Writing for the Hindu, Dr Anil Kakodkar, who had earlier been co-opted by the government in negotiating the "deal" with the NSG expresses

Nuclear Suppliers' Group (NSG)..additional restrictions for transfer of ENR (enrichment and reprocessing) technologies with adherence to the Nuclear Non-Proliferation Treaty (NPT) being a condition for transfer has caused huge unease in India

 Vardarajan, the Hindu's strategic affairs analyst, and a former supporter of the deal too, has had to admit that the deal is dead.

Meanwhile, China has gone ahead and "grandfathered" another two reactors for Pakistan. In other words, without committing anything, Pakistan has as much access to technology and fuel as India has after it has waived its sovereign rights to develop its own nuclear techology for its protection. Ofcourse, India is open to buying reactors from the rest of the world, when Germany and now Japan have taken legislative steps to shut down nuclear power, given its unviability when total cost of operations and accidents are accounted for.

It may serve our negotiators well to remember that NSG was set up as an Anti India cartel. Nothing has changed. The latest guidelines on technology transfer impact only one country - India.

Japanese earthquake - lessons for India

The earthquake, followed by the Tsunami in Japan has been devastating. In the words of PM Naoto Kan, Japan is facing the "worst crisis since WWII".  Despite extremely strict building norms, over 10,000 people are feared dead.

What initially started as one nuclear power plant shut down, has now (as I write this) extended to three - Fukushima (now in its third day), Onagawa, and Tokay No2 plant. Japan is the only country to have suffered a nuclear explosion. A nuclear power plant in Japan would necessarily have followed the strictest possible building norms. Besides, Japan is anyway an earthquake prone area - and even regular buildings are constructed to withstand the earth shaking. Despite this, nuclear power has again proven to be risky and dangerous.

Imagine the consequences in a country like India - where building norms are generally lax, and casually enforced. Add to that the lack of liability of foreign suppliers, and a high density of human population - with minimal emergency systems - and you get a potent recipe for disaster. Recent reports suggest that the Buoys that were floated as part of India's early warning Tsunami system are already part of the inventory of  junk dealers.

Someone needs to ask - do we REALLY need those nuclear reactors - just so that some multinational can grow rich? After the fiasco of the CVC, perhaps this is another policy where the PM needs to admit to the mistake of his decision.

India's strategic loss

My first post in the new year, from a new location - Hyderabad (I should now rename the blog perhaps) has to do with some sad news - the passing away of K. Subrahmanyam – regarded as the father of strategic planning on issues regarding defence and foreign affairs. Unfortunately, I had no interaction with him – except for reading most of his columns appearing in the press – where he was a prolific contributor.

Subrahmanyam – a one-time nuclear hawk – inconsistently supported the nuclear deal that India signed up with the US – a move I would ascribe to advancing age, and a lack of appreciation of the economic realities of the new world. That opinion notwithstanding, I always found his writing to be interesting and well informed. While his insights were called upon by many governments – the Congress government, and the NDA, they were not always taken to their logical conclusion - many of the recommendations of his report after the Kargil war remain unimplemented.

In his demise, India has lost a strategic thinker who had the best for India at heart. May his soul rest in peace.

Nuclear lies and obfuscation

The Civil Liability for Nuclear Damage Bill 2010 is well on its way to become law. The Congress and the BJP have, between them decided to sell the Indian national interest to the multinational corporations, with a few crumbs that the Indian companies will pick up along the way. Here is a set of expert opinion that I wish had received greater attention:

1. Dr. A Gopalakrishnan - former Chairman AEC - and a consistent opponent of the legislation - explains why the preamble and object of the bill is a veil of lies. He clearly lays down the benefits to US companies.
2. A report in the Hindu - that illustrates the way the government is going to bulldoze the interests of the local population

3. My friend M V Ramana, a physicist currently at Princeton and Suvrat Raju explain the moral hazard in the legislation. At an estimated cost of Rs18cr megawatt, it still remains a wonder why the same effort is not spend on solar

4. Vardarajan - who had of late shifted to defending the government policy on nuclear power, is constrained to comment on weak bill that will let foreign suppliers off the hook in the eventuality of a nuclear holocaust

5. More by Ramana and Raju on the moral hazard of the policy being followed by the government.Given the effect we see on the world economy by the relatively benign "moral hazard" of unsupervised banking, I shudder at the effects that this moral hazard will eventually have on India.

Besides the cost of setting up the power plant @18crs per MW (estimated) other costs that need to be considered (and have been outlined in the discussions of the Parliamentary committee - but not quantified) are:
- Finance ministry - Insurance premium will be likely in the range of 1.8% - 2.7% of the 300mn SDR that is mandated
- Home ministry - Costs of damage arising out of conflict, hostilities, war, terrorism - need to add to security forces
- Ministry of Water resources - Ministry does not have facility for testing water quality from view point of nuclear contamination. Need to study impact of contamination on humans, crops, animals
- Ministry of environments and forest - what efforts are to be made to safeguard the environment around the nuclear facility
- Department of food - storage of foodgrains - distance and operating procedure
- Ministry of health and family welfare - Ministry is nowhere ready to meet emergency arising out of nuclear or radiological emergency. Hospitals not equipped - bill does not have a single clause on health care during nuclear emergencies - only compensation due to health effects of radiation.
- Ministry of Agriculture - Disaster Management system not aligned for radiological fallout.
- Ministry of defense - fool-proof protection of nuclear assets cannot be guaranteed

Assuming that these concerns are addressed, what would be the actual "cost" of nuclear power. And of course, we have not even taken into account the cost of storing the "spent fuel" over the next 100 years !

Ofcourse, the Prime Minster has committed to the US that India will pass this bill - and the Prime Minister is an honourable man. If Indian lives are lost, that is just "collateral damage".

The nuclear sell-out is complete

With the nuclear liability bill emerging from the Parliamentary standing committee with minor, facile modifications, India is well on its path to energy bankruptcy. For some inexplicable reason, India continues down the path of nuclear armageddon - presenting itself as the most attractive destination for dumping poor, outdated technology, with no cost to the manufacturer. Chellany's article has expressed it very well. I have heard commentators attribute motives to him - but no sensible rebuttal yet.

On the Indo US nuclear deal too, the sell out is complete. A couple of years back when the deal was the centre of the vote of confidence in the Lok Sabha, a senior bureaucrat had assured me that the negotiators too were patriots and they would protect Indian interests. The Prime Minister had repeatedly assured the house that the "Hyde Act" was an internal regulation of the US and did not apply to the deal. As was expected, the Prime Minsiter was economical with the truth, and hopes of a deal favourable to India have been belied. The Indian government has reduced India to a level of a rentier state - much like Pakistan. No wonder a fund manager recently commented - "everything is for sale in India" - including ofcourse the National interest.

Update on Defence and related issues

An update on current status of defence, nuclear deterrent and our neighbours:

Pakistan receives latest F-16's with night fighting capabilities

NSG Update from Vardarajan - US attempts but fails to stop ENR technology transfer to non-NPT countries (INDIA)

K Subrahmanyam points out China is the main proliferator - an interesting analysis

An old post from Dr. Jeffery Lewis where he seeks to make out that Indian strategists support signing CTBT - Interesting but treat with circumspection

India announces green flag for future nuclear disasters - freedom from prosecution

Twenty three years, thousands dead, an absconding American and no one in jail. This summarizes the outcome of the long lasting case against Union Carbide - the judgement of which was pronounced today. The facts are undisputed - US company UC had an accident in its plant in Bhopal which killed approximately 6x the number of people that died in 9-11. It took 23 years to establish the fact and send NO ONE to jail. Not surprisingly, the US CEO is an absconder, refused to stand trial in India, and was not even NAMED in the judgement. No doubt another case of US-India partnership that Secretary of State Hillary Clinton alluded to a couple of days back

If anyone doubts that imperialism survives as economic coercion, the tenor of the above statement will clear such doubts. Clinton applauds India for its help "shape the Copenhagen Accord and pledged to lower its greenhouse gas emissions intensity by up to 25 per cent" - a position which has the potential to make India's own growth more expensive - and is at variance to its own, well argued, earlier position that India did not need to make any commitments of this nature. 


Another pat on the back - "During Prime Minister Manmohan Singh's visit to Washington in November, he and President Obama launched the partnership to advance clean energy" - translated, this means a large contract to buy nuclear reactors from the moribund US nuclear industry. 


To buy the nuclear reactors, India will need to pass a bill that will allow US suppliers to go scott free in the event of an accident. Clearly, the US had learned from the UC disaster. Equally, our rulers continue to treat Indian lives as dispensable - sitting at the "high table" of nuclear trade (wonder where this mythical table is) is worth some sacrifices to Dr. Singh.

The nuclear sell-out progresses

The government introduced the nuclear "no-foreign liability" bill in Parliament on the last day of the session. Apparently, this was on the basis of a deal with some parties in opposition that the bill will be referred to a committee of the house that would be chaired by the opposition. As expected, this has not happened, with the bill being referred to a committee in the Rajya Sabha - chaired by a congressman. While the SP is crying foul, the government is secure in the thought that they have thrown a bone in the direction of the SP in agreeing to the obnoxious and racist suggestion of the SP and other parties of their ilk to include caste in the latest census. Not surprisingly, since this is a Congress initiative, there is no protest (a few columnists aside) in the English media to this extremely retrograde and communal move. 

The congress spin doctors initially tried to explain away the infirmities of the nuclear bill though half-truths and obfuscation. Brahma Chellaney's article here is worth a read for getting a real picture on the issues with the bill. But with the PM busy out-sourcing and sacrificing India's defence and foreign policies to American interests, and the key opposition party in slumber, we can only hope that the many gods Indians pray to are watching over India's interests.  

India’s relations with US – Missing the Left

The Left front is no longer a force to reckon within the Indian Parliament for the next five years at the least. After supporting the previous UPA government for four and a half years, the Left and Congress fell out over relations with the US – and India started the process of getting closer to the USA.

I have argued elsewhere that aligning with the US was a mistake that India was making. That India should either have done it sixty years ago, or failing that, stayed in the shadows for another decade, when a declining economic clout of the USA and a rising graph for India would enable India to negotiate from a position of strength. Some early signs of the differences that exist in the world views of the USA and India are now visible.

While the PM was expressing his love for George Bush, or requesting the autograph of the new president, the USA was, rhetoric to the contrary notwithstanding, busy downgrading its relations with India. One of the best articulation of this is in the speech that Robert Blackwill, the former US ambassador to India delivered on May 5, 2009 at the CII conference at New Delhi

The Indian viewpoint is well articulated by Brahma Chellany

In International relationships, what matters is not what is said, but what is done. And what has been done by the US is to relegate India to the third hyphen in the troika of Afghanistan-Pakistan-India. That the government of the day seems to have managed to sell this to the Indian public as a winner of a relationship is itself an acknowledgement of the Congress’s ability at Spin – the opposition has a lot to learn in this regard

Post-nuclear deal - can we use USA help

The rebuff that the government of Pak and India received from the Pak Army establishment on the demand to send the ISI chief to India, has presumably gotten the US secretary of state to head towards India to cool tempers. Unfortunately, at present there seems to be no tempers to cool - atleast among the political leadership.

India is at present in a position to demand the highest possible help from the USA in terms of both, equipment and intelligence to plan its rejoinder to the ISI threat. Bruce Reidel, the incoming President's South Asia advisor is no sympathiser of Pakistan. However, the ability of the currently, leaden-feet leadership of the India to turn this to India's advantage is in doubt.

If ever there was a need for a popularly elected (not nominated) political leadership in India, it is NOW.